KARACHI: The board of directors at Dawood Hercules has given its go-ahead to investing Rs17.45 billion in Malaysian firm, Edotco Pakistan, which recently acquired Jazz communication towers across the country, according to a notice sent to the stock exchange on Friday.
"Dawood Hercules Corporation is in the process of injecting up to a cumulative amount of Rs17.45 billion in Edotco Pakistan in the form of equity and/or a short term loan," company secretary Shafiq Ahmed said in the notification to the Pakistan Stock Exchange (PSX).
Dawood Hercules' share price increased 2% to RsRs120.02 with 84,400 shares changing hands on Friday.
Edotco Pakistan, the Malaysian telecommunication infrastructure services company, in collaboration with Dawood Hercules, acquired Jazz communication towers for $940 million.
Edotco acquired the towers business through its wholly owned subsidiary Tanzanite Tower Private Limited. Dawood Hercules will acquire 45% shareholding in the subsidiary.
A Jazz official told the other day that sale proceeds would be invested in expanding the company's network. "We will focus on being more digital," he said.
"The total transaction consideration for the proposed acquisition of $940 million will be funded through a combination of debt and equity," the cellular firm said a recent press statement.
Meanwhile, Dawood Hercules said that under the share subscription agreement, it will "subscribe to 1.74 billion shares of Rs10 each of Edotco PK at an approximate consideration of Rs17.45 billion".
"Upon completion of the proposed subscription, edotco Labuan and DH Corp will hold 55% and 45% respectively of the issued and paid-up share capital of edotco PK," the notification said.
After completion of the sale, Deodar will enter into a master services agreement (MSA) with Jazz, whereby it will continue to provide tower services to Jazz.
Published in The Express Tribune, January 20th, 2018.
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